Question

Which is generally not a benefit experienced by retailers participating in VMI?

a) Fewer stockouts
b) Slower inventory turns
c) More timely replenishment
d) Lower labor costs

Answer 1

Slower inventory turns are generally not considered a benefit of VMI as they can indicate overstocking and tied-up capital, unlike fewer stockouts, timely replenishment, and lower labor costs which are actual benefits.

Step-by-step explanation:

The question asks about the benefits that are generally not experienced by retailers participating in Vendor Managed Inventory (VMI). Answer choice (b) 'Slower inventory turns' is generally not a benefit of participating in VMI. The benefits often include fewer stockouts, more timely replenishment, and lower labor costs due to the supplier taking on more responsibility for managing inventory levels. Slower inventory turns would indicate that inventory is moving out at a slower pace, which can be undesirable as it may suggest overstocking and tied-up capital.